Bottom line comes before the environment for NZ businesses

Bottom line comes before the environment for NZ businesses

June 5, 2011

New Zealand may pride itself as being a ‘clean green’ country, but when it comes to the boardroom, it is cost management, public attitude and recruitment and retention of staff that counts.

In the just released 2011 Grant Thornton International Business Report, New Zealand ranked near the bottom of 39 countries surveyed for the importance of ‘saving the planet’ when it came to assessing what was driving businesses in the implementation of more ethical business practices.

Probably more surprising, is the company that New Zealand is keeping in the ‘save the planet’ stakes. Of the 39 countries surveyed, the United States was bottom of the class with only 15% of respondents thinking ‘saving the planet’ was important, followed by Australia 20%, Denmark 22%, Italy 23%, Germany 25%, Netherlands 26%, Hong Kong 27% and then New Zealand on 28%. Top of the list were Georgia, Philippines and Turkey.

Eugene Sparrow, Partner, Privately Held Business of Grant Thornton New Zealand said that compared with the last survey in 2008, the importance of saving the planet to New Zealand businesses had decreased by 9%.

“New Zealand businesses have been working hard to get through the global financial crisis. The nice-to-haves went out the window a couple of years back. As we see the economy improve and business pick up I expect we’ll see a shift in attitude. Given New Zealand’s population, it may just be that businesses here don’t believe they can make a significant difference to the planet?”

Sparrow also said that while New Zealand businesses remain focused on the merits of corporate social responsibility (CSR) in terms of building brand, securing key staff and winning future contracts, the figures have weakened in the last three years.

“In 2008, 82% of New Zealand businesses based the drive to implement ethical business practices around the recruitment and retention of staff. This has dropped to 62%, however, once again I’d expect to see this pick up as our economy strengthens.

“The same for cost management which dropped from 68% to 59% while public attitudes and brand building increased slightly from 55% to 57%, highlighting the importance of public opinion in shaping businesses' CSR priorities

Sparrow said that from a global perspective, there appeared a sharp division between the more mature economies and those of the BRIC nations.

“As businesses, and indeed consumers, in mature economies struggle with the fallout from the economic downturn, altruistic concerns over the environment have been forced into a backseat role. Businesses are focusing on the bottom line and consumers are looking for ways to make declining real disposable incomes go further. That said, businesses in emerging markets, as we have seen with the wider global economy, appear ready to take the initiative in driving the CSR agenda forward.

“Sixty per cent of the BRIC nations and 59% of those in the ASEAN group cite saving the planet as a driver towards more ethical business practices, compared with just 30% in the EU and 27% in North America.,” he said.

As for CSR, in an increasingly crowded and dynamic marketplace, businesses globally are becoming more aware that adopting a proactive approach to wider corporate social responsibility issues can help them to stand out in the minds of employees, consumers and potential partners.

“This importance is being overshadowed in many places by the oppressive global economy, but as business picks up, this importance will increase, possibly very quickly,” he said.

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